Financial planning is an ongoing process that creates a roadmap for your money and helps you attain your life's goals. Whether you want to build a home or travel to different countries, having a financial plan ensures you get to do all these things without worrying about where to get your next meal or how to deal with financial emergencies. Think of a financial plan as a comprehensive picture of your finances and goals, including techniques or strategies you need to implement and achieve your financial objectives.
A great financial plan should include all elements of your economic life, including cash flows, debt, investments, savings, insurance, and other factors. Unfortunately, the process can be tricky and confusing, especially for someone who lacks the knowledge and resources to create a financial plan effectively.
Financial planning entails figuring out how much to spend for your retirement and how much income you should expect to pay for all your living expenses. It may also include changing your current lifestyle to help you effectively and efficiently reach your financial goals. If you want to succeed, we suggest that you don't do this alone. Get help from financial planners as they are more experienced and have credentials to help you achieve your goals.
What Does Financial Planning Consist Of?
The first step to financial planning is setting financial goals for yourself. As much as possible, be very detailed about what you want to achieve to make it easier to set aside money for it. Next, consider asking yourself what you want to achieve 5 or 10 years from now? How do you imagine your retirement? Take time for this, as it's a crucial first step.
As soon as you have your financial goals written, the next step is to determine your monthly cash flow — find out how much money exactly (or a close estimate) is going in or out. Knowing how much money to expect and where it's going can help you develop practical short-term and long-term financial goals.
Develop a budget to track how you use your money and determine how much you need to save every month. While we recommend the 50/30/20 budget principle, you can always tweak this depending on what you want to achieve in the future.
To ensure that you don't use the money you've saved for other expenses, it would help to put up an emergency fund. You can always start small until you build an emergency fund that can cover repairs or medical expenses. Having an emergency fund makes sure that you don't end up with a massive credit card debt.
Investing your money is also an option to help you grow your savings. However, we do suggest that you don't put all your eggs in one basket. Consider meeting with a financial planner to help you tackle investments.
Most importantly, pay down your high-interest debt so you don't end up paying two or three times what you owe to the banks or lending institutions.
When Should I Start Financial Planning?
You don't need to be rich to start financial planning. The best time to start planning for your financial future is NOW. Financial planning is necessary to help you attain financial freedom, but you need to also commit to it to ensure that you don't get lost or, worse, lose your money.\\ financial planner will help you navigate the entire process.
How A Financial Planner Can Help Achieve Your Goals
What does a financial planner do? A personal financial planner helps you create an inventory of all your finances as well as a plan to help you achieve your financial goals. In addition, they can provide you with expert advice on effectively going about the financial process and maximizing its benefits.
Modern Wealth Concepts is a fee-only financial planner committed to guiding you into achieving your short-term and long-term financial goals. We can assess your financial situation and maximize your financial resources to help you enjoy life and build sustainable wealth. Unlike other financial planners, we offer a flat fee for our services and don't get a commission from the products we offer, so we only have your best interests in mind. We don't favor any financial product — our team only offer investments or other financial products that can truly benefit our clients. Contact us to learn more.